On August 25, 2022, the company released its semi-annual report of 2022, with operating income of 711 million yuan, an increase of 7.03% over the same period last year, and net profit of 116 million yuan, an increase of 5.06% over the same period last year.

The field of urban operation and management platform ushered in policy catalysis, and the company has a number of successful cases in the construction of provincial and municipal platforms. According to the notice on comprehensively speeding up the Construction of Urban Operation and Management platform issued by the Ministry of Housing and Construction, by the end of 2023, all provinces and autonomous regions will have completed provincial-level urban transport management service platforms, and cities at and above the prefectural level will basically build urban transport management service platforms. By the end of 2025, the "one-network unified management" system and mechanism of urban operation and management will be basically improved, the efficiency of urban operation and the ability of risk prevention and control will be significantly enhanced, the city will be scientific and refined, and the level of intelligent governance will be greatly improved.

The company has undertaken the construction of digital urban management information platforms in more than 200 prefecture-level cities and more than 1000 districts (county-level cities and counties), and is in a leading market position in the industry. in the new round of urban operation management service platform construction wave is expected to fully benefit. In terms of provincial platforms, in the first half of 2022, the company undertook the construction of operation and management service platforms for cities at the provincial (municipal) level, such as Hainan, Heilongjiang and Chongqing; in the first half of 2022, the company undertook the operation and management service platforms for dozens of city and county-level cities, such as Jining, Xi'an, Daqing, Baiyin, Shangqiu and Anqing. At the same time, 2022H1 has won the bid for a number of one-network management projects, some of which reach the level of 100 million yuan, and won the bid for Anhui, Guangxi, Hubei and other regional projects in the field of municipal social governance platform.

Based on the traditional innovation, operation, official website, meta-universe and other multi-point force. 1) Urban operation: as of 2022H1, the company ranks first in the market share of comprehensive operation services in big data, a gridded city across the country, and "Qiji" 2.0 upgraded vehicles have been tested, which are mainly used in community-wide environmental hygiene, parking order, personal safety and other scenarios. 2) Pipe network business: the transformation of urban pipe network is one of the main contents of the new infrastructure. The company has strengthened its cooperation with local surveying and mapping institutes and successively landed the platform of underground municipal infrastructure in Jiujiang City and the general survey project of municipal infrastructure in Xuchang City. and trenchless pipeline repair projects for drainage and water supply in many cities. 3) Meta Universe: the official version of the new generation of "Crystal" digital twin platform created by the company will be released in the near future, and its data processing capacity has been greatly improved. It has been applied in many major projects, such as Suzhou City, Anhui Province, Jinan initial area, Jiangbei District of Chongqing, and so on. As of the announcement date of the China News, the amount of related urban management and social governance projects based on the digital twin platform totaled 430 million yuan.

Investment advice: under the general trend of digital economy construction, the company, as a leading enterprise in a smart city, is expected to benefit from the promotion of "one-network management" and "grid management"; at the same time, the company has launched "L4 self-driving + operation". Enhance the ability of urban data governance, and gradually promote the transformation of their business model. According to this announcement, the implementation and settlement of some projects of the company affected by the epidemic was delayed in the first half of the year, but with the relief of the epidemic, the company's operation gradually recovered, and it is expected that from the third quarter to the whole year, the operating results will continue to return to the track of rapid development. It is estimated that in 2022-2024, the EPS of the company will be 0.56, 0.73, 0.94, corresponding to 29X, 22X, 17X, maintaining the "recommended" rating.

Risk hints: the promotion of new technology is not as expected, the impact of the epidemic is uncertain, and competition in the industry intensifies.